Record Update exclusive

Budget challenges ahead for U-M, state

By Laurel Thomas Gnagey

University leaders say they will examine an executive budget plan put forth by Governor Jennifer Granholm that calls for a 3 percent cut in state support for higher education — which is approximately $10 million for the University — before commenting on its impact on U-M's budget.

Vice President for Government Relations Cynthia Wilbanks says the University is in the early stages of developing the University’s FY 2010 General Fund budget, which the Board of Regents is expected to vote on in June.

“We cannot fail to acknowledge the extraordinary challenges that our state faces this year,” Wilbanks says. “The governor's recommendation for higher education spending will now become part of the budget building process underway at the U-M.

“We look forward to working with the governor and legislators over the next several months to minimize the negative consequences of what we anticipate will be another difficult year,” she says.

State Budget Director Robert Emerson presented the 2010 budget recommendations Thursday to a joint meeting of the House and Senate Appropriations Committees. The plan that cuts $100 million from higher education also calls for state universities to freeze tuition and fees for the remainder of this academic year and the next.

University leaders say it is too early in the budgeting process to address tuition and fees, but Provost Teresa Sullivan says keeping U-M accessible to students is very important. “This is why we have raised money for financial aid and work hard to keep college affordable while maintaining the excellence of our programs.”

U-M will continue its long-standing policy of meeting the full demonstrated financial need of all undergraduate Michigan residents and increasing centrally funded financial aid at a higher rate than tuition.

Sullivan also says it is clear U-M must continue its efforts to reduce expenses to meet financial challenges ahead. Over the past six years, the University has cut $135 million from operating expenditures.

Sullivan has named an ad hoc committee of faculty, staff and two students to identify cost-cutting opportunities in the University’s academic operations. This group will meet several times in March and April. Faculty, staff and students will be invited to submit suggestions to the panel.

“We anticipate the next several years will present numerous fiscal challenges, and we may have to delay or rethink some of our programs and projects. In setting budget priorities, protecting the University’s academic mission — including recruiting and retaining outstanding faculty members — is at the forefront of our decision-making,” Sullivan says.

The provost says work will continue to recruit 100 new junior tenure-track faculty members in areas that advance the University's major teaching and research initiatives such as alternative energy and environmental sustainability. Funding for this already has been allocated. To date, 25 positions have been approved and hiring is underway in a number of areas.